MT578 Settlement Allegement

When MT578 is used

Settlement in a CSD needs two matching instructions, one from each side. When the counterparty’s instruction arrives and the account servicer finds nothing from you to match it with, the servicer "alleges" the trade to you in an MT578. The sender is the account servicer (a local custodian, a sub-custodian acting for a global custodian, or a CSD or ICSD for its direct participants); the receiver is the account owner or its agent. Most allegements come from the CSD’s matching engine: in T2S the market infrastructure sends the ISO 20022 allegement to the CSD or directly connected participant, and the custodian passes it on as an MT578.

Read the direction carefully. In an MT578 the trade details are those of the counterparty’s instruction: :22H::REDE//RECE means the counterparty has instructed a receipt, so you are expected to deliver and would send an MT542 or MT543; REDE//DELI means the counterparty is delivering to you and you would send an MT540 or MT541. PAYM//APMT or PAYM//FREE tells you whether the counterparty instructed against payment or free of payment. Getting this backwards is the most common mistake when an allegement is turned into an instruction.

Field 23G gives the function. NEWM is a new allegement. REMO tells you that an allegement sent earlier is no longer outstanding because the alleged party (you) has now instructed and the two instructions matched; some servicers also send a removal when the counterparty cancelled. CANC cancels an earlier MT578, because it was sent by mistake or because the alleging party cancelled its instruction. CANC and REMO quote the SEME of the earlier MT578 in 20C::PREV in the linkage sequence.

What to do with an allegement. Check whether you know the trade: compare the ISIN, quantity, settlement amount, trade and settlement dates and the counterparty’s agent (DEAG or REAG in sequence E1) with your trade blotter or confirmations. If you know it, send your own instruction with the same details before the cut-off; the allegement is then removed and the MT548 for your instruction reports MACH. If you do not know it, do not instruct just to make the allegement go away: contact the counterparty or the account servicer. Many firms run an allegement report each day and treat an old unanswered allegement as a risk: in the EU, a trade that matches late or fails can lead to cash penalties under the CSD Regulation.

An allegement is often the mirror of a problem on your side. If you did instruct but your instruction did not match (a different settlement date, quantity or amount), you see an MT578 for the counterparty’s version and an MT548 with NMAT for yours. Compare the two field by field: the difference is usually what the NMAT reason code says, for example DDAT or DMON. See why an instruction is unmatched.

The MT586 Statement of Settlement Allegements lists all open allegements on an account at one time, which helps with a daily review; the MT578 reports them one by one as they arrive or change. Servicers differ in when they send them: some send in real time, others in batches or only a set number of days before the settlement date. Check your servicer’s guide.

MT578 format: sequences and fields

Rules worth knowing

• The MT578 is sent by the account servicer and received by the account owner. You never send an MT578 to your custodian: you answer an allegement with your own MT540 to MT543.
• REDE and PAYM describe the counterparty’s instruction. Your instruction has the opposite direction and the same payment type: RECE with APMT calls for an MT543, RECE with FREE an MT542, DELI with APMT an MT541, DELI with FREE an MT540.
• With 23G REMO or CANC, the linkage sequence quotes the SEME of the earlier MT578 in 20C::PREV, so you can close the allegement in your system.
• Sequence B (TRADDET), sequence C (FIAC) and sequence E (SETDET) with at least one settlement party are mandatory. Inside them, 98a::SETT, 35B, 22H::PAYM, 22H::REDE, 36B::SETT, 97a::SAFE and 22F::SETR are mandatory.
• Network rules also govern which settlement parties may appear together and when amounts and value dates are needed; they follow the same logic as the MT540 to MT543 instructions.

MT578 example

ZagTrader Test Bank (ZAGTAEADXXX) sold 10,000 shares on 20 October 2026 for settlement on 22 October. The buyer’s agent BRKRAEADXXX has instructed a receipt against payment at the local CSD, but ZagTrader has not yet sent its MT543. In the evening of the trade date the custodian CUSTAEADXXX alleges the trade to ZagTrader.

{1:F01CUSTAEADAXXX0000000000}{2:I578ZAGTAEADXXXXN}{4:
:16R:GENL
:20C::SEME//CA578-0004712
:23G:NEWM
:98C::PREP//20261020183010
:16R:LINK
:20C::MITI//CSD2610200098765
:16S:LINK
:16S:GENL
:16R:TRADDET
:98A::SETT//20261022
:98A::TRAD//20261020
:90B::DEAL//ACTU/AED25,45
:35B:ISIN AEZAGT000016
ZAGTRADER TEST HOLDING PJSC
:22H::PAYM//APMT
:22H::REDE//RECE
:16S:TRADDET
:16R:FIAC
:36B::SETT//UNIT/10000,
:97A::SAFE//ZAG-SAFE-0001
:16S:FIAC
:16R:SETDET
:22F::SETR//TRAD
:16R:SETPRTY
:95P::PSET//CSDXAEADXXX
:16S:SETPRTY
:16R:SETPRTY
:95P::REAG//BRKRAEADXXX
:20C::PROC//BRK261020-7781
:16S:SETPRTY
:16R:SETPRTY
:95P::DEAG//CUSTAEADXXX
:16S:SETPRTY
:16R:AMT
:19A::SETT//AED254500,
:16S:AMT
:16S:SETDET
-}

Line by line

ZagTrader checks its blotter, finds the sale and sends an MT543 with the same ISIN, quantity, dates, amount, place of settlement and REAG. Once the two instructions match, the custodian sends an MT578 with 23G REMO quoting :20C::PREV//CA578-0004712, and the MT548 for the MT543 reports MACH.

If ZagTrader did not know the trade, it would contact the buyer (quoting PROC and MITI) instead of instructing.

All BICs, references and accounts are made up; the ISIN has a valid check digit.

Common errors and rejects

1. Direction read the wrong way round

   REDE and PAYM describe the counterparty’s instruction. Booking REDE//RECE as a receipt and sending an MT541 produces two receipt instructions that can never match, and the allegement stays open. Reverse the direction: RECE calls for a delivery (MT542 or MT543), DELI for a receipt (MT540 or MT541).

2. Allegement stays open after you instructed

   Your instruction exists but does not match. Look at the MT548 for it: NMAT with a reason such as DDAT, DQUA, DMON or DEPT names the field that differs from the allegement. Agree the right value with the counterparty; whoever is wrong cancels and re-instructs.

   How to fix it

3. Allegement for a trade you do not know

   The counterparty may have the wrong account, the wrong counterparty or a trade that was never agreed. Do not instruct to clear it. Contact the counterparty using PROC, TRRF or COMM, or ask your custodian to query it through MITI. If it is not yours, the counterparty must cancel; you then receive a CANC or REMO.

4. Allegement arrives after the cut-off

   Some servicers send allegements only shortly before the settlement date, or batch them. A late instruction is accepted on a best effort basis or rejected with LATE or ADEA, and the trade may fail. Agree trades and instruct on trade date instead of waiting for an allegement.

5. Duplicate or stale allegements in your queue

   A NEWM followed by a CANC or REMO for the same SEME means the allegement is closed. If your system does not link them through 20C::PREV, old allegements stay on the open list and staff chase trades that already settled.

MT578 in ISO 20022

The ISO 20022 counterpart is sese.028 Securities Settlement Transaction Allegement Notification. In T2S the market infrastructure sends sese.028 to CSDs and directly connected participants, and custodians translate it into an MT578 for clients who use ISO 15022. Swift’s MT and MX equivalence table maps the MT578 to three messages, one per function: sese.028 for a new allegement (NEWM), sese.029 Securities Settlement Allegement Removal Advice for a removal (REMO) and semt.020 Securities Message Cancellation Advice for a cancellation (CANC). The full list of open allegements is the semt.019 Statement of Settlement Allegements, the counterpart of the MT586.

Securities messages were not part of the November 2025 payments deadline. The MT578 remains in use on FIN; whether you receive the MT or the MX depends on how you connect to your custodian or CSD.

Related messages

• MT586Statement of Settlement Allegements
• MT540Receive Free
• MT541Receive Against Payment
• MT542Deliver Free
• MT543Deliver Against Payment
• MT548Settlement Status and Processing Advice
• MT537Statement of Pending Transactions
• MT549Request for Statement/Status Advice
• sese.023Securities Settlement Transaction Instruction
• sese.024Securities Settlement Transaction Status Advice

• From instruction to settled position: MT540-548, sese.023/024/025 and the statements that follow.
• Unmatched instruction (NMAT)

Codes used in MT578

• NMAT
• MACH
• DDAT
• DMON
• DQUA
• LATE
• TRAD

MT578 questions

What is an MT578 settlement allegement?

A message from your custodian or CSD saying that a counterparty has instructed a settlement against your account and that no matching instruction from you has been found. It gives the counterparty’s trade details so you can instruct, or dispute the trade.

What is the difference between an MT578 and an MT548?

An MT548 reports on an instruction you sent: accepted, matched, pending or failing. An MT578 reports on an instruction the counterparty sent that you have not matched. When your instruction exists but differs, you often receive both: an MT548 with NMAT and an MT578 with the counterparty’s version.

If the MT578 says REDE//RECE, do I receive or deliver?

You deliver. REDE describes the counterparty’s instruction: RECE means the counterparty receives the securities from you. Answer with an MT542 (free) or an MT543 (against payment).

What does 23G REMO mean in an MT578?

The allegement is no longer outstanding, normally because you have now sent a matching instruction. CANC instead means the allegement itself is withdrawn, for example because the counterparty cancelled its instruction.

What is the ISO 20022 equivalent of the MT578?

sese.028 Securities Settlement Transaction Allegement Notification, with sese.029 for the removal of an allegement and semt.020 for a cancellation. The statement of all open allegements, the MT586, corresponds to semt.019.

Do I have to answer every allegement?

Every allegement needs an action: instruct if the trade is yours, or contact the counterparty if it is not. An ignored allegement usually ends as a failed or late-matching trade, which in the EU can lead to CSDR cash penalties.